by David Kelly

Getting a cash back credit card is often cited by 'experts' as being a good way of getting something for nothing from credit card companies, though - as with all the credit cards products available on the market - any scam which implies that the card holder will be able to outsmart huge corporations is probably somewhat exaggerated. However, there are certainly ways to make the most of the perks these cards offer, the most important of which is to always pay the full outstanding amount every month. This avoids paying any interest on the money you are borrowing, and allows you to get the maximum amount of cash back without losing out to fees or charges.

Cash back credit cards are a great way to earn money on regular purchases such as groceries, and certain cards like the Barclaycard platinum credit card currently offer a great 2% cashback on supermarket and petrol monthly. Using your cash back credit card as you would your debit card is the best way to maximise the money you will get back and if you brush up on which affiliated products and outlets are associated with your chosen cash back card you can even qualify for discounts and points. A good example of this type of shopping is to get a Virgin credit card and use it when buying music to qualify for money off Virgin holidays as well as improving the cash back you earn. Of course it is important to choose a card that reflects your lifestyle - if you never buy CDs or holiday outside of the UK, a Virgin card is probably not for you!

One of the biggest attractions to these sorts of credit card packages is the idea that you are being rewarded for using your card. Whereas using your debit card helps you to enjoy the convenience of not handling cash, a debit card purchase does not entitle the customer to protection of their goods under section 75 of the Consumer Credit Act. Even part buying any product with your credit card means you are entitled to this cover - which means the credit card company are as liable to replace the goods should there be any fault. This sort of cover can be invaluable when purchasing holidays on credit cards, where tickets and reservations can be proved on card statements and a similar level of cover applies.

The importance of reading the small print when entering into any credit agreement can't be stressed enough, especially when some cards charge well over the average 16.9% APR (such as cards created for those with bad credit ratings or CCJs). Always staying one step ahead of fees and late charges is the name of the game as a credit card holder as avoiding these will only help to boost your credit rating.